Logan Company Uses a Job Order Costing System Job 19 for 100 Units Is Started in Department a Rate

question 29

Essay

Logan Company uses a job order costing system.A predetermined overhead rate of $7 per machine hour in Department A and 220 percent per direct labor dollar in Department B has been established based upon the following information at the beginning of the year:
$$\begin{array}{l}&\text { Department A}&\text { Dapartment B} \\\text { Estimated overhead } & \$ 4,600 & \$ 88,000 \\\text { Estimated machine hours } & 5,800 & 12,500 \\\text { Estimated direct labor dollars } & 40,000 & \$ 40,000 \\\text { Estimated direct labor hours } & 5,000 & 3,125\end{array}$$ Job 19 for 100 units is started in Department A and completed in Department B.Determine the total cost of Job 19 and complete the job cost card based on the following information:
$\begin{array}{lrr}&\text { Department A}&\text { Dapartment B} \\ \text { Direct materials } & \$ 800 & \$ 950 \\\text { Direct labor dollars } & \$ 490 & \$ 180 \\\text { Direct labor hours } & 30 & 12 \\\text { Machine hours } & 15 & 30\end{array}$

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Definitions:

Human Capital

The collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value.

Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.

Catch-Up Effect

The theory that poorer economies will tend to grow at faster rates than wealthier ones, allowing them to catch up in terms of income and other economic measures.

Capital

Refers to assets or resources that businesses or individuals use to generate wealth through investment.